In India, monsoons rains continue to fall, but there’s been enough time in between the wet days/nights to see the karif seeding season accelerate. For a 2nd week in a row, more than 6.18 million acres of pulse acres got planted. This puts the total number of pulse crops acres seeded at 17.5M, well above last year’s pace of 13.8 million and an incredible 91% above the 5-year average of 9.2 million acres (and you thought a lot of pulse acres were planted in Canada….). With the significant uptick in acres as a result of significant domestic AND world shortages the past 2 years (hello record prices), the Indian government is launching “a new policy framework to rein in the inflationary impact and stabilize the supply of pulses.” Their goal is to be self-sufficient in pulses within the next 5-6 years (currently, there’s about 30-40% shortfall in domestic production versus domestic consumption, demanding on how the harvest goes) and could get their by looking at new MSPs (minimum support prices), more acres to irrigation, and/or the introduction of new varieties.

USDA Shows Crops Ahead of Schedule

The USDA’s crop progress report out yesterday continues to show what we’ve been thinking: the crop in the US is ahead if schedule and looking great. 56% of the US corn crop is silking (vs 47% last year at this time and 46% 5-year average) and 76% of fields are still rated in good-to-excellent condition, including Iowa, Illinois, and Minnesota all with G/E corn ratings above 80% (at 76% G/E, this is one of the highest ratings ever for the US corn crop for the 3rd week of July)! 59% of US soybean crops are blooming (51% a year ago, 49% 5-year average), 18% of fields are already setting pods (14% a year ago, 13% average), and 71% of the crop is rated G/E (same as last week and obviously above the 62% a year ago). For the cereals, 76% of the winter wheat crop has been harvested (72% last year, 73% 5-year average), 70% of the US spring wheat crop is rated 69% G/E, 66% of oats are considered in G/E shape, and 73% of barley is considered G/E as well, all down 1-point week-over-week.

Also out from the USDA, or rather their Ukraine attaché, was a recent report that Ukraine’s wheat stocks falling to a 4-year low, despite a new memorandum of understanding signed by the Ukraine Ag Ministry, farmers, and other grain trade representatives. The MOU is intended to slow exports to ensure enough domestic supplies are available but today, Ukrainian flour millers are running at about 30% capacity as they compete with the allure of exports. Given the surprising size of the Black Sea wheat crops, coupled with the large carryover of North American inventories, we may see lower wheat prices for quite some time. If corn were to see some upside because of this heat, wheat is likely to follow, and with no bullish demand story showing up, we’d take advantage and be a seller again of another block or two (10-20%).

Around the Ag In Motion outdoor farm show outside Saskatoon this week? Stop by the FarmLead booth in the FCC Ag Pavilion to chat with me about your grain marketing plan moving forward.

COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.

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About the Author

Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace.
He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead.
In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow.
He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!).
Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.

Grain markets this morning are almost all green as U.S. grain prices are seeing the benefit from a weaker U.S. Dollar, but that’s also pushing other currencies higher, including the Canadian Loonie and Brazilian Real.